SCHEDULE 14A
(RULE 14A-101)
SEC FILE NUMBER 33-3349
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant | |
Check the appropriate box:
| | Preliminary proxy statement.
| | Confidential for use of
the commission only (as
permitted by Rule
14a-6(e)(2)).
|X| Definitive proxy statement.
| | Definitive additional materials.
| | Soliciting material pursuant to Rule 14a-12.
Aztec Communications Group, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(S) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee: (check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act
Rule 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ___ (2)
Aggregate number of securities to which transaction applies: ___
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transaction: ___ (5) Total fee paid: ___
| | Fee paid previously with preliminary materials: ___
| | Check box if any part of the fee is offset as provided by Exchange Act Rule
0-1(a)(2) and identify the filing for which the offsetting fee was paid
previously, identify the previous filing by registration statement number, or
the form or schedule and the date its filing.
(1) Amount Previously Paid: ___
(2) Form, Schedule or Registration Statement No.: ____ (3) Filing
Party: ___
(4) Date Filed: ___
Aztec Communications Group, Inc.
3730 Kirby, Suite 1200 * Houston, Texas 77098
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December 10, 2003
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Aztec Communications Group, Inc., to be held at the offices of Sonfield &
Sonfield, 770 South Post Oak Lane, Suite 435, Houston, Texas 77056 on December
29, 2003 at 10:00 a.m. (CST), Houston, Texas time. Details regarding the meeting
and the business to be conducted are more fully described in the accompanying
Notice of Annual Meeting and Proxy Statement. We hope you will be able to attend
the annual meeting on January 10, 2004 to listen to information regarding
actions to be taken, and to ask any questions you may have.
Your vote is very important. Whether or not you plan to attend the annual
meeting, please vote as soon as possible. In order to facilitate your voting,
you may vote in person at the meeting, by sending in your written proxy, by
telephone, or by using the Internet. Your vote by telephone, over the Internet
or by written proxy will ensure your representation at the annual meeting if you
cannot attend in person. Please review the instructions on the proxy card
regarding each of these voting options.
Thank you for your on-going support and continued interest in Aztec
Communications Group, Inc.
Very truly yours,
/s/L. Mychal Jefferson, II
--------------------------------
L. Mychal Jefferson, II, President and Chief Executive Officer
AZTEC COMMUNICATIONS GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 10, 2004
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of
Aztec Communications Group, Inc., a Utah corporation, will be held on December
29, 2003 at 10:00 a.m. (CST), Houston, Texas time, at the offices of Sonfield &
Sonfield, 770 South Post Oak Lane, Suite 435, Houston, Texas 77056 for the
following purposes:
1. To change our state of incorporation from Utah to Nevada; 2. To elect
three directors to the Board of Directors;
3. To ratify the selection of Gwendolyn J. Giles CFE, CPA as independent
auditors for the fiscal year ending August 31, 2004; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only stockholders of record at the close of
business on October 25, 2003 are entitled to receive notice of, to attend, and
to vote at the meeting and any reconvened meeting following an adjournment of
the meeting. All stockholders are cordially invited to attend the meeting in
person. Any stockholder attending the meeting and entitled to vote may vote in
person even if such stockholder returned a proxy.
FOR THE BOARD OF DIRECTORS,
/s/L. Mychal Jefferson, II
--------------------------------
L. Mychal Jefferson, II, President and Chief Executive Officer
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING PLEASE COMPLETE,
DATE, AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY TO THE COMPANY.
This proxy statement and proxy card are being distributed to the stockholders
on or about December 10, 2003.
AZTEC COMMUNICATIONS GROUP, INC.
The following questions and answers are intended to respond to
frequently asked questions concerning the reincorporation of Aztec
Communications Group, Inc. in Nevada. These questions do not, and are not
intended to, address all the questions that may be important to you. You should
carefully read the entire Proxy Statement, as well as its appendices and the
documents incorporated by reference in this Proxy Statement.
Q: Why am I receiving this proxy statement?
A: The Board of Directors of Aztec Communications Group, Inc., a Utah
corporation, is furnishing this proxy statement to stockholders of record of
Aztec, as of October 25, 2003, in connection with the solicitation of proxies to
be voted at Aztec's annual meeting of stockholders, or at any adjournment of the
meeting, for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. The meeting will be held at Aztec's principal executive offices
at the offices of Sonfield & Sonfield, 770 South Post Oak Lane, Suite 435,
Houston, Texas 77056, on January 10, 2004 at 10:00 a.m., Houston, Texas time.
Q: Who is soliciting my vote?
A: This proxy statement is furnished in connection with the solicitation of your
vote by the Board of Directors of Aztec. Aztec will bear the cost of
solicitation of proxies. In addition to the use of the mails, proxies may also
be solicited by personal interview, facsimile transmission and telephone by
directors, officers, employees and agents of Aztec, none of whom will receive
additional compensation. Aztec will also supply brokers, nominees or other
custodians with the number of proxy forms, proxy statements and annual reports
they may require for forwarding to beneficial owners and Aztec will reimburse
these persons for their expenses.
Q: When was this proxy statement mailed to stockholders?
A: This proxy statement was first mailed to stockholders on or about
December 10, 2003.
Q: What may I vote on?
A: You may vote on the following:
o The proposal to change our state of incorporation from Utah to Nevada;
o The proposal to elect three directors to serve on the Board of Directors;
o The proposal to ratify the selection and engagement of Gwendolyn J.
Giles CFE, CPA as independent auditors for the fiscal year ending
August 31, 2004; and
o At the discretion of the persons named in the enclosed form of proxy,
on any other matter that may properly come before the meeting or any
adjournment thereof.
Q: What are the principal features of the reincorporation?
A: The reincorporation will be accomplished by a merger of Aztec Communications
Group, Inc., a Utah corporation ("Aztec Utah") with and into our wholly owned
subsidiary, Aztec Communications Group, Inc., a Nevada corporation ("Aztec
Nevada"). One new share of the Aztec Nevada common stock will be issued for each
share of our common stock. The shares of Aztec Utah will cease to trade on the
over-the-counter bulletin board market and the shares of Aztec Nevada will begin
trading in their place beginning on or about the Effective Date, under CUSIP
number 05480K 20 2 and a new trading symbol which has not yet been assigned.
Q: Why is Aztec Utah reincorporating in Nevada?
A: Aztec does not intend to carry on any business except the business necessary
to wind up and liquidate its business and affairs. In addition, we believe that
the Reincorporation in Nevada will give us more flexibility and simplicity in
various corporate transactions. Nevada has adopted a Revised Statute that
includes by statute many concepts created by judicial rulings in other
jurisdictions and provides additional rights in connection with the issuance and
redemption of stock. In addition, it is possible that a substantial number of
our shares will be sold "short" without the delivery of certificates
representing the shares sold. This is known as a "naked short" and, if it
occurred, will result in significant downward pressure on the value of our
common stock. Nevada law permits us to require the delivery of certificates
representing our shares when there is a change in our capital structure and,
thereby, reduce the number of "naked short" positions affecting the price of our
common stock.
Q: How will the reincorporation affect my ownership of Aztec Utah?
A: After the effective date of the reincorporation and the exchange of your
stock certificates, you will own the same class and the same percentage of
Aztec Nevada.
Q: How will the reincorporation affect the owners, officers, directors and
employees of Aztec Utah?
A: Our officers, directors and employees will become the officers, directors
and employees of Aztec Nevada after the effective date of the reincorporation.
Q: How will the reincorporation affect the business of Aztec Utah?
A: Aztec Nevada will continue its business at the same locations and with the
same assets. Aztec Utah will wind up and liquidate its business and affairs and
cease to exist on the effective date of the reincorporation.
Q: How do I exchange certificates of Aztec Utah for certificates of Aztec
Nevada?
A: If our shareholders approve the Reincorporation, you will be sent (i) a form
letter of transmittal and (ii) instructions for surrender of your certificates
representing our common stock in exchange for certificates representing shares
of Aztec Nevada common stock. Upon surrender of a certificate representing our
common stock to Aztec Nevada, together with a duly executed letter of
transmittal, Aztec Nevada will issue, as soon as practicable, a certificate
representing the number of shares of Aztec Nevada you are entitled to receive.
Q: What happens if I do not surrender my certificates of Aztec Utah?
A: Because of the Reincorporation in Nevada, holders of our common stock are not
required to exchange their certificates for Aztec Nevada certificates. Dividends
and other distributions declared after the Effective Date with respect to common
stock of Aztec Utah and payable to holders of record thereof after the Effective
Date will be paid to the holder of any unsurrendered common stock certificate of
Aztec Utah, which by virtue of the Reincorporation are represented thereby and
such holder will be entitled to exercise any right as a shareholder of Aztec
Nevada, until such holder has surrendered the certificate of Aztec Utah.
Q: What if I have lost Aztec Utah Certificates?
A: If you have lost your Aztec Utah Certificates, you should contact our
transfer agent as soon as possible to have a new certificate issued. You may be
required to post a bond or other security to reimburse us for any damages or
costs if the certificate is later delivered for conversion. The address of our
transfer agent is:
Cottonwood Stock Transfer Corp.
5899 South State Street
Salt Lake City, UT 84107
Phone: 801-266-7151
Fax: 801-262-0907
Q: Can I require Aztec Utah to purchase my stock?
A: No. Under Utah law, you are not entitled to appraisal and purchase of your
stock as a result of the reincorporation.
Q: Who will pay the costs of reincorporation?
A: Aztec Utah will pay all of the costs of Reincorporation in Nevada, including
distributing this Information Statement. We may also pay brokerage firms and
other custodians for their reasonable expenses for forwarding information
materials to the beneficial owners of our common stock. We do not anticipate
contracting for other services in connection with the reincorporation. Each
stockholder must pay the costs of exchanging their certificates for new
certificates.
Q: Will I have to pay taxes on the new certificates?
A: We believe that the reincorporation is not a taxable event and that you will
be entitled to the same basis in the shares of Aztec Nevada that you had in our
common stock. EVERYONE'S TAX SITUATION IS DIFFERENT AND YOU SHOULD CONSULT WITH
YOUR PERSONAL TAX ADVISOR REGARDING THE TAX EFFECT OF THE REINCORPORATION.
Q: How does the Board recommend I vote on the proposals?
A: * The Board recommends a vote FOR the proposal to change our state of
incorporation from Utah to Nevada; o The Board recommends a vote FOR each of the
nominees to serve on the Board of Directors; and o The Board recommends a vote
FOR the ratification of the independent auditor.
Q: Who is entitled to vote?
A: Stockholders of record at the close of business on October 25, 2003
(the record date) may vote at this meeting.
Q: How do I vote?
A: Stockholders entitled to vote may vote by any one of the following
methods:
o By mail by completing, dating, and signing the enclosed proxy card and
returning it in the enclosed postage-prepaid envelope; o In person, at the
meeting. o If you hold your shares through a bank, broker or other nominee, they
will give you separate instructions for voting your
shares.
Q: How can I revoke or change my vote?
A: If you have already voted and wish to change or revoke your proxy,
you may do so at any time prior to the meeting by any one of the following
methods:
o Notifying in writing L. Mychal Jefferson, II, Chief Executive Office,
Aztec Communications Group, Inc., 3730 Kirby, Suite
1200, Houston, Texas 77098;
o Voting in person at the meeting;
o Returning a later-dated proxy card that is received prior to the
meeting; or
o Subsequently voting by telephone or by following the Internet
instructions found on your proxy card.
Q: Who will count the votes?
A: Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the Annual Meeting, and such election
inspectors will determine whether or not a quorum is present.
Q: How many votes do I have?
A: As of the close of business on the record date of October 25, 2003, 7,948,100
shares of common stock were issued and outstanding. Every stockholder is
entitled to one (1) vote for each share of common stock held.
Q: What is a "Quorum" and what vote is required to pass proposals?
A: A "quorum" is a majority of the outstanding shares. The person with the right
to vote the shares may be present at the meeting or represented by proxy. There
must be a quorum for the meeting to be held. Abstentions and broker non-votes
are each included in the determination of the number of shares present at the
meeting for purposes of determining a quorum. A plurality of the votes cast at
the meeting is required to elect directors. Cumulative voting is not permitted
in the election of directors. The affirmative vote of a majority of the voting
power represented at the meeting and entitled to vote is required on all other
matters subject to approval.
Q: Who can attend the annual meeting and how do I get on the guest list?
A: All stockholders as of the close of business on the record date of October
25, 2003 can attend. To be included on the guest list, you may check the box on
your proxy card. If your shares are held by a broker and you would like to
attend, please write to L. Mychal Jefferson, II, Chief Executive Office, Aztec
Communications Group, Inc., 3730 Kirby, Suite 1200, Houston, Texas 77098.
Include a copy of your brokerage account statement or omnibus proxy (which you
can get from your broker), and we will place your name on the guest list.
Q: How will voting on any other business be conducted?
A: We do not know of any business to be considered at this annual meeting other
than the proposals described in this proxy statement. If any other business is
presented at the annual meeting, your signed proxy card gives discretionary
authority to L. Mychal Jefferson, II to vote on such matters.
Q: When are the stockholder proposals for the next annual meeting due?
A: Stockholder proposals will be eligible for consideration for inclusion in the
proxy statement for the next annual meeting, which will be held in the final
half of calendar year 2004, pursuant to Rule 14a-8 under the Securities and
Exchange Act of 1934, if such proposals are submitted in writing to L. Mychal
Jefferson, II, Chief Executive Officer, Aztec Communications Group, Inc., 3730
Kirby, Suite 1200, Houston, Texas 77098 and received before the close of
business on June 30, 2004. Notices of stockholder proposals submitted outside
the processes of Rule 14a-8 will be considered timely, pursuant to the advance
notice requirement set forth in Aztec's bylaws, if such notices are received by
the secretary of Aztec not less than 60 nor more than 90 days prior to the
scheduled date of the annual meeting in the manner provided in the bylaws or, if
less than 70 days' notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, stockholders may give timely notice of
a proposal no later than 10 days after the day such notice or public disclosure
was made, whichever was earlier.
Q: Where are your principal executive offices?
A: Our principal executive offices are located at 3730 Kirby, Suite 1200,
Houston, Texas 77098, telephone number (281) 587-4645.
PROPOSAL I
CHANGE OUR STATE OF INCORPORATION FROM UTAH TO NEVADA
The following discussion summarizes certain aspects of our
reincorporation in Nevada. This summary does not include all of the provisions
of the Plan and Agreement of Merger between Aztec Utah and Aztec Nevada, a copy
of which is attached hereto as Exhibit "A," or the Articles of Incorporation of
Aztec Nevada, a copy of which is attached hereto as Exhibit "B." Copies of the
bylaws of Aztec Nevada are available for inspection at our principal office and
we will send copies to stockholders upon request.
Principal Reasons for Reincorporation
The Company believes that the Reincorporation in Nevada will give us
more flexibility and simplicity in various corporate transactions. Nevada has
adopted a Revised Statute that includes by statute many concepts created by
judicial rulings in other jurisdictions and provides additional rights in
connection with the issuance and redemption of stock.
In addition, it is possible that a substantial number of our shares
will be sold "short" without the delivery of certificates representing the
shares sold. This is known as a "naked short" and, if it occurred, will result
in significant downward pressure on the value of our common stock. Nevada law
permits us to require the delivery of certificates representing our shares when
there is a change in our capital structure and, thereby, reduce the number of
"naked short" positions affecting the price of our common stock.
We believe our reincorporation in Nevada will save expenses for taxes
and fees when we reach profitable operation because Nevada imposes no corporate
income taxes on corporations that are incorporated in Nevada.
Principal Features of the Reincorporation
The reincorporation will be effected by the merger of Aztec Utah with
and into our wholly owned subsidiary, Aztec Nevada. Aztec Nevada will be the
surviving entity.
On the Effective Date, (i) each of our stockholders will be entitled to
receive one fully paid and non-assessable share of Aztec Nevada for each share
of our common stock outstanding as of the Effective Date, (ii) each share of
Aztec Nevada common stock owned by Aztec Utah will be canceled and resume the
status of authorized and unissued Aztec Nevada common stock, and (iii) Aztec
Utah will cease its corporate existence in the State of Utah. We anticipate that
the shares of Aztec Utah will cease trading on the first trading date following
the Effective Date and shares of Aztec Nevada will begin trading in their place
but under a new CUSIP number and symbol.
The Articles of Incorporation and bylaws of Aztec Nevada are
significantly different from the Articles of Incorporation and bylaws of Aztec
Utah. Because of the differences between the Articles of Incorporation and
bylaws of Aztec Utah and the laws of the State of Utah, which govern Aztec Utah,
and the Articles of Incorporation and bylaws of Aztec Nevada and the laws of the
State of Nevada, which govern Aztec Nevada, your rights as stockholders will be
affected by the reincorporation. See the information under "Significant
Differences between Aztec Utah and Aztec Nevada" for a summary of the
differences between the Articles of Incorporation and bylaws of Aztec Utah and
the laws of the State of Utah and the Articles of Incorporation and bylaws of
Aztec Nevada and the laws of the State of Nevada.
The board of directors and officers of Aztec Nevada consists of the
same persons that are currently our directors and officers. Our daily business
operations will continue at the principal executive offices at 3730 Kirby, Suite
1200, Houston, Texas 77098.
Reservation of Rights
Even if you approve the Reincorporation in Nevada, our Board of Directors
reserves the right not to proceed, if, at any time prior to filing the
Certificate of Merger with the Secretary of State of the State of Utah, our
Board of Directors determines that the Reincorporation is no longer in our and
our stockholders' best interests.
Vote Required
Adoption of Proposal One requires approval by the holders of a majority of
the outstanding shares of common stock entitled to vote at the annual meeting.
Abstentions may be specified on this proposal to Reincorporate in Nevada.
Abstentions will be considered present and entitled to vote at the annual
meeting. Abstentions will have the effect of a vote against this proposal.
Broker non-votes will be considered present but not entitled to vote on Proposal
One. Broker non-votes will not have an effect on this proposal.
Recommendation of Board of Directors
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL TO
CHANGE OUR STATE OF INCORPORATION FROM UTAH TO NEVADA
How to Exchange Aztec Utah Certificates for Aztec Nevada Certificates
If our shareholders approve the Reincorporation, you will be sent (i) a
form letter of transmittal and (ii) instructions for surrender of your
certificates representing our common stock in exchange for certificates
representing shares of Aztec Nevada common stock. Upon surrender of a
certificate representing our common stock to Aztec Nevada, together with a duly
executed letter of transmittal, Aztec Nevada will issue, as soon as practicable,
a certificate representing the number of shares of Aztec Nevada you are entitled
to receive.
If you own our shares through a nominee or in a brokerage account, you
do not have a certificate to submit for exchange. Usually, your nominee or
broker will submit certificates representing our shares for exchange on your
behalf. We recommend that you contact your nominee or broker and request that a
certificate be issued to you so that you may submit it for exchange with the
enclosed letter of transmittal. This will ensure that there are actually shares
of Aztec Nevada in your name on the books and records of Aztec Nevada.
Because of the Reincorporation in Nevada, holders of our common stock
are not required to exchange their certificates for Aztec Nevada certificates.
Dividends and other distributions declared after the Effective Date with respect
to common stock of Aztec Utah and payable to holders of record thereof after the
Effective Date will be paid to the holder of any unsurrendered common stock
certificate of Aztec Utah, which by virtue of the Reincorporation are
represented thereby and such holder will be entitled to exercise any right as a
shareholder of Aztec Nevada, until such holder has surrendered the certificate
of Aztec Utah.
Capitalization
Our authorized capital consists of 50,000,000 shares of common stock,
$.001 par value, and no shares of Preferred stock. As of October 25, 2003, the
record date for those stockholders entitled to notice of the reincorporation,
there were 7,948,100 shares of our common stock outstanding. The authorized
capital of Aztec Nevada consists of 120,000,000 shares of capital stock divided
into 100,000,000 shares of common stock, $.001 par value per share, and
20,000,000 shares of preferred stock, $.001 par value per share. As a result of
the reincorporation and mandatory exchange of the common stock, Aztec Nevada
will have outstanding approximately 7,948,100 shares of common stock and no
shares of preferred stock. The reincorporation will not affect our total
stockholder equity or total capitalization.
SIGNIFICANT DIFFERENCES BETWEEN Aztec Utah AND Aztec Nevada
Aztec Utah was incorporated under the laws of the State of Utah and
Aztec Nevada is incorporated under the laws of the State of Nevada. Those
stockholders that tender their certificates representing the shares of our
common stock for exchange will become stockholders of Aztec Nevada. Their rights
as stockholders will be governed by the Title 7, Chapter 78 of the Nevada
Revised Statutes ("Nevada law") and the Articles of Incorporation and bylaws of
Aztec Nevada rather than the Utah General Corporation Law ("Utah law") and the
Aztec Utah Articles of Incorporation and bylaws.
Significant Changes In Aztec Utah's Charter and By-laws To Be Implemented By
the Reincorporation
Corporate Name. The Reincorporation will not effect a change in Aztec
Utah's name. The name will remain "Aztec Communications Group, Inc."
Limitation of Liability. The Nevada Articles contain a provision
limiting or eliminating, with certain exceptions, the liability of directors to
Aztec Nevada and its shareholders for monetary damages for breach of their
fiduciary duties. The Aztec Utah Articles contains no similar provision. The
Board of Directors believes that such provision will better enable Aztec Nevada
to attract and retain as directors responsible individuals with the experience
and background required to direct Aztec Nevada's business and affairs. It has
become increasingly difficult for corporations to obtain adequate liability
insurance to protect directors from personal losses resulting from suits or
other proceedings involving them by reason of their service as directors. Such
insurance is considered a standard condition of directors' engagement. However,
coverage under such insurance is no longer routinely offered by insurers and
many traditional insurance carriers have withdrawn from the market. To the
extent such insurance is available, the scope of coverage is often restricted,
the dollar limits of coverage are substantially reduced and the premiums have
risen dramatically.
At the same time directors have been subject to substantial monetary
damage awards in recent years. Traditionally, courts have not held directors to
be insurers against losses a corporation may suffer as a consequence of
directors' good faith exercise of business judgment, even if, in retrospect the
directors' decision was an unfortunate one. In the past, directors have had
broad discretion to make decisions on behalf of the corporation under the
"business judgment rule." The business judgment rule offers protection to
directors who, after reasonable investigation, adopt a course of action that
they reasonably and in good faith believe will benefit the corporation, but
which ultimately proves to be disadvantageous. Under those circumstances, courts
have typically been reluctant to subject directors' business judgments to
further scrutiny. Some recent court cases have, however, imposed significant
personal liability on directors for failure to exercise an informed business
judgment with the result that the potential exposure of directors to monetary
damages has increased. Consequently legal proceedings against directors relating
to decisions made by directors on behalf of corporations have significantly
increased in number, cost of defense and level of damages claimed. Whether or
not such an action is meritorious, the cost of defense can be well beyond the
personal resources of a director.
The Nevada legislature considered such developments a threat to the
quality and stability of the governance of Nevada corporations because of the
unwillingness of directors, in many instances, to serve without the protection
which insurance traditionally has provided and because of the deterrent effect
on entrepreneurial decision making by directors who do serve without the
protection of traditional insurance coverage. In response, in 1987 the Nevada
legislature adopted amendments to the Nevada Revised Statues which permit a
corporation to include in its charter a provision to limit or eliminate, with
certain exceptions, the personal liability of Directors to a corporation and its
shareholders for monetary damages for breach of their fiduciary duties and to
purchase insurance to provide protection to Directors. Similar charter
provisions limiting a director's liability are permitted under Utah Law,
however, the Aztec Articles contain no such provision.
The Board of Directors believes that the limitation on directors'
liability permitted under Nevada law will assist Aztec Nevada in attracting and
retaining qualified directors by limiting directors' exposure to liability. The
Reincorporation proposal will implement this limitation on liability of the
directors of Aztec Nevada, inasmuch as Article XVI of the Nevada Articles
provides that to the fullest extent that the NRS now or hereafter permits the
limitation or elimination of the liability of directors, no director will be
liable to Aztec Nevada or its stockholders for monetary damages for breach of
fiduciary duty. Under such provision, Aztec Nevada's directors will not be
liable for monetary damages for acts or omissions occurring on or after the
Effective Date of the Reincorporation, even if they should fail through
negligence or gross negligence, to satisfy their duty of care (which requires
directors to exercise informed business judgment in discharging their duties).
Article XVI would not limit or eliminate any liability of directors for acts or
omissions occurring prior to the Effective Date. As provided under Nevada law,
Article XVI cannot eliminate or limit the liability of directors for breaches of
their duty of loyalty to Aztec Nevada; acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law, paying a
dividend or effecting a stock repurchase or redemption which is illegal under
the NRS, or transactions from which a director derived an improper personal
benefit. Further, Article XVI would not affect the availability of equitable
remedies, such as an action to enjoin or rescind a transaction involving a
breach of a director's duty of care. Article XVI pertains to breaches of duty by
directors acting as directors and not to breaches of duty by directors acting as
officers (even if the individual in question is also a director). In addition,
Article XVI would not affect a director's liability to third parties or under
the federal securities laws.
Article XVI is worded to incorporate any future statutory revisions
limiting directors' liability. It provides, however, that no amendment or repeal
of its provision will apply to the liability of a director for any acts or
omissions occurring prior to such amendment or repeal, unless such amendment has
the affect of further limiting or eliminating such liability.
Aztec Utah has not received notice of any lawsuit or other proceeding
to which Article XVI might apply. In addition, Article XVI is not being included
in the Nevada Articles in response to any director's resignation or any notice
of an intention to resign. Accordingly, Aztec Nevada is not aware of any
existing circumstances to which Article XVI might apply. The Board of Directors
recognizes that Article XVI may have the effect of reducing the likelihood of
derivative litigation against directors, and may discourage or deter
stockholders from instituting litigation against directors for breach of their
duty of care, even though such an action, if successful, might benefit Aztec
Nevada and its shareholders. However, given the difficult environment and
potential for incurring liabilities currently facing directors of publicly held
corporations, the Board of Directors believes that Article XVI is in the best
interests of Aztec Nevada and its stockholders, since it should enhance Aztec
Nevada's ability to retain highly qualified directors and reduce a possible
deterrent to entrepreneurial decision making. In addition, the Board of
Directors believes that Article XVI may have a favorable impact over the long
term on the availability, cost, amount and scope of coverage of directors'
liability insurance, although there can be no assurance of such an effect.
Article XVI may be viewed as limiting the rights of stockholders, and
the broad scope of the indemnification provisions of Aztec Nevada's could result
in increased expense to Aztec Nevada. Aztec Nevada believes, however, that these
provisions will provide a better balancing of the legal obligations of, and
protections for, directors and will contribute to the quality and stability of
Aztec Nevada's governance. The Board of Directors has concluded that the benefit
to stockholders of improved corporate governance outweighs any possible adverse
effects on stockholders of reducing the exposure of directors to liability and
broadening indemnification rights. Because Article XVI deals with the potential
liability of directors, the members of the Board of Directors may be deemed to
have a personal interest in effecting the Reincorporation.
Indemnification. The NRS authorize broad indemnification rights which
corporations may provide to their directors, officers and other corporate
agents. The Nevada Articles reflect the provisions of Nevada law, as amended,
and, as discussed below, provide broad rights to indemnification.
In recent years, investigations, actions, suits and proceedings,
including actions, suits and proceedings by or in the right of a corporation to
procure a judgment in its favor (referred to together as "proceedings"), seeking
to impose liability on, or involving as witnesses, directors and officers of
publicly-held corporations have become increasingly common. Such proceedings are
typically very expensive, whatever their eventual outcome. In view of the costs
and uncertainties of litigation in general it is often prudent to settle
proceedings in which claims against a director or officer are made. Settlement
amounts, even if material to the corporation involved and minor compared to the
enormous amounts frequently claimed, often exceed the financial resources of
most individual defendants. Even in proceedings in which a director or officer
is not named as a defendant he may incur substantial expenses and attorneys'
fees if he is called as a witness or otherwise becomes involved in the
proceeding. Although Aztec Utah's directors and officers have not incurred any
liability or significant expense as a result of any proceeding to date the
potential for substantial loss does exist. As a result, an individual may
conclude that the potential exposure to the costs and risks of proceedings in
which he may become involved may exceed any benefit to him from serving as a
director or officer of a public corporation. This is particularly true for
directors who are not also officers of the corporation. The increasing
difficulty and expense of obtaining directors' and officers' liability insurance
discussed above has compounded the problem.
The broad scope of indemnification now available under Nevada law will
permit Aztec Nevada to offer its directors and officers greater protection
against these risks. The Board of Directors believes that such protection is
reasonable and desirable in order to enhance Aztec Nevada's ability to attract
and retain qualified directors as well as to encourage directors to continue to
make good faith decisions on behalf of Aztec Nevada with regard to the best
interests of Aztec Nevada and its stockholders.
The Nevada Articles are quite different from the Aztec Utah Articles
and require indemnification of Aztec Nevada's directors and officers to the
fullest extent permitted under applicable law as from time to time in affect,
with respect to expenses, liability or loss (including, without limitation,
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred by any person
in connection with any actual or threatened proceeding by reason of the fact
that such person is or was a director or officer of Aztec Nevada or is or was
serving at the request of Aztec Nevada as a director or officer of another
corporation or of a partnership, joint venture; trust, employee benefit plan or
other enterprise at the request of Aztec Nevada. The right to indemnification
includes the right to receive payment of expenses in advance of the final
disposition of such proceeding; consistent with applicable law from time to time
in effect; provided, however, that if the NRS requires the payment of such
expenses in advance of the final disposition of a proceeding, payment shall be
made only if such person undertakes to repay Aztec Nevada if it is ultimately
determined that he or she was not entitled to indemnification. Directors and
officers would not be indemnified for lose, liability or expenses incurred in
connection with proceedings brought against such persons otherwise than in the
capacities in which they serve Aztec Nevada. Under the NRS Aztec Nevada may,
although it has no present intention to do so, by action of the Board of
Directors, provide the same indemnification to its employees, agents, attorneys
and representatives as it provides to its directors and officers. The Nevada
Articles provide that such practices are not exclusive of any other rights to
which persons seeking indemnification may otherwise be entitled under any
agreement or otherwise.
The Nevada Articles specify that the right to indemnification is a
contract right. The Nevada Articles also provides that a person seeking
indemnification from Aztec Nevada may bring suit against Aztec Nevada to recover
any and all amounts entitled to such person provided that such person has filed
a written claim with Aztec Nevada has failed to pay such claim within thirty
days of receipt thereof. In addition, the Aztec Nevada Articles authorize Aztec
Nevada to purchase and maintain indemnity insurance, if it so chooses to guard
against future expense.
The Nevada Articles provide for payment of all expenses incurred,
including those incurred to defend against a threatened proceeding.
Additionally, the Nevada Articles provides that indemnification shall continue
as to a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person. The Nevada
Articles also provide that to the extent any director or officer who is, by
reason of such a position, a witness in any proceeding, he or she shall be
indemnified for all reasonable expenses incurred in connection therewith.
Under Utah law, as with Nevada law, rights to indemnification and
expenses need not be limited to those provided by statute. As a result, under
Nevada law and the Nevada Articles, Aztec Nevada will be permitted to indemnity
its directors and officers, within the limits established by law and public
policy, pursuant to an express contract, a by-law provision, a stockholder vote
or otherwise, any or all of which could provide indemnification rights broader
than those currently available under the Aztec Utah Articles or expressly
provided for under Nevada or Utah law.
Insofar as the Nevada Articles provide indemnification to directors or
officers for liabilities arising under the Securities Act of 1933, it is the
position of the Securities and Exchange Commission that such indemnification
would be against public policy as expressed in such statute and, therefore,
unenforceable.
The Board of Directors recognizes that Aztec Nevada may in the future
be obligated to incur substantial expense as a result of the indemnification
rights conferred under the Nevada Articles, which are intended to be as broad as
possible under applicable law. Because directors of Aztec Nevada may personally
benefit from the indemnification provisions of the Aztec Nevada Articles, the
members of the Board of Directors may be deemed to have a personal interest in
the effectuation of the Reincorporation.
Significant Differences Between the Corporation Laws of Nevada and Utah
The Company is incorporated under the laws of the State of Utah and
Aztec Nevada is incorporated under the laws of the State of Nevada. On
consummation of the Reincorporation, the stockholders of the Company, whose
rights currently are governed by Utah law and the Aztec Utah Articles and the
Aztec Utah Bylaws, which were created pursuant to Utah law, will become
stockholders of a Nevada company, Aztec Nevada, and their rights as stockholders
will then be governed by Nevada law and the Nevada Articles and the Nevada
Bylaws which were created under Nevada law.
Although the corporate statutes of Utah and Nevada are similar, certain
differences exist. The most significant differences, in the judgment of the
management of the Company, are summarized below. This summary is not intended to
be complete, and stockholders should refer to the Nevada Revised Statutes of the
State of Nevada (the "NRS") and the Utah Revised Business Corporation Act ("Utah
law") to understand how these laws apply to the Company and Aztec Nevada.
Classified Board of Directors. Both Utah and Nevada law permit
corporations to classify their board of directors so that less than all of the
directors are elected each year to overlapping terms. Neither Aztec Utah nor
Aztec Nevada have classified boards.
Removal of Directors. Under Utah law, members of a classified board of
directors may only be removed for cause. Removal requires the vote of a majority
of the outstanding shares entitled to vote for the election of directors. Nevada
law provides that any or all directors may be removed by the vote of two-thirds
of the voting interests entitled to vote for the election of directors.
Nevada does not distinguish between removal of directors with and without
cause. The reincorporation may make it more difficult for the stockholders of
Aztec Nevada to remove a member of the board of directors because it increases
the number of shares that must be voted for removal.
Special Meetings of Stockholders. Utah law permits special meetings of
stockholders to be called by the board of directors or by any other person
authorized in the Articles of Incorporation or bylaws to call a special
stockholder meeting. Nevada law does not address the manner in which special
meetings of stockholders may be called but permits corporations to determine the
manner in which meetings are called in their bylaws. The Articles of
Incorporation and bylaws of Aztec Utah and the Articles of Incorporation and
bylaws of Aztec Nevada each provide that special meetings of the stockholders
may be called only by the board of directors or a committee of the board of
directors that is delegated the power to call special meetings by the board of
directors. There will be no change to this provision as a result of the
reincorporation.
Special Meetings Pursuant to Petition of Stockholders. Utah law
provides that a director or a stockholder of a corporation may apply to the
Court of Chancery of the State of Utah if the corporation fails to hold an
annual meeting for the election of directors or there is no written consent to
elect directors in lieu of an annual meeting taken, in both cases for a period
of thirty (30) days after the date designated for the annual meeting or if there
is no such date designated, within 13 months after the last annual meeting.
Nevada law is more restrictive. Under Nevada law stockholders having not less
than 15% of the voting interest may petition the district court to order a
meeting for the election of directors if a corporation fails to call a meeting
for that purpose within 18 months after the last meeting at which directors were
elected. The reincorporation may make it more difficult for the stockholders of
Aztec Nevada to require that an annual meeting be held without the consent of
the board of directors.
Cumulative Voting. Cumulative voting for directors entitles
stockholders to cast a number of votes that is equal to the number of voting
shares held multiplied by the number of directors to be elected. Stockholders
may cast all such votes either for one nominee or distribute such votes among up
to as many candidates as there are positions to be filled. Cumulative voting may
enable a minority stockholder or group of stockholders to elect at least one
representative to the board of directors where such stockholders would not
otherwise be able to elect any directors. Both Utah and Nevada law permit
cumulative voting if provided for in the certificate or articles of
incorporation and pursuant to specified procedures. Neither the Articles of
Incorporation of Aztec Utah nor the Articles of Incorporation of Aztec Nevada
provide for cumulative voting. The reincorporation does not change the fact that
the stockholders do not have the right to cumulate their votes.
Vacancies. Under Utah law, vacancies on the board of directors may be
filled by the affirmative vote of a majority of the remaining directors then in
office, even if less than a quorum. Any director so appointed will hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred. Similarly, Nevada law provides that vacancies may be filled by
a majority of the remaining directors, though less than a quorum, unless the
articles of incorporation provide otherwise. The bylaws of both Aztec Utah and
Aztec Nevada address the election of persons to fill vacancies on the board of
directors in the same manner.
Indemnification of Officers and Directors and Advancement of Expenses.
Utah and Nevada have substantially similar provisions regarding indemnification
by a corporation of its officers, directors, employees and agents. Utah and
Nevada law differ in their provisions for advancement of expenses incurred by an
officer or director in defending a civil or criminal action, suit or proceeding.
Utah law provides that expenses incurred by an officer or director in defending
any civil, criminal, administrative or investigative action, suit or proceeding
may be paid by the corporation in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined that he
or she is not entitled to be indemnified by the corporation. A Utah corporation
has the discretion to decide whether or not to advance expenses, unless its
Articles of Incorporation or bylaws provides for mandatory advancement. Nevada
law differs in two respects: First, Nevada law applies to advance of expenses
incurred by both officers and directors. Second, under Nevada law, the articles
of incorporation, bylaws or an agreement made by the corporation may provide
that the corporation must pay advancements of expenses in advance of the final
disposition of the action, suit or proceedings upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined that he or she is not entitled to be indemnified by the corporation.
There will be a significant difference in stockholders' rights with respect to
this issue because the bylaws of Aztec Utah do not provide for the mandatory
advancement of expenses of directors and officers and the Articles of Aztec
Nevada do so provide.
Limitation on Personal Liability of Directors. Nevada law permits a
corporation to adopt provisions limiting or eliminating the liability of a
director to a company and its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that such liability does not arise from
certain proscribed conduct, including breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law or liability to the corporation based on unlawful dividends or
distributions or improper personal benefit. The Articles of Incorporation of
Aztec Nevada exclude director liability to the maximum extent allowed by Nevada
law. Nevada law permits, and Aztec Nevada has adopted, a broader exclusion of
liability of both officers and directors to the corporation and its
stockholders, providing for an exclusion of all monetary damages for breach of
fiduciary duty unless they arise from act or omissions which involve intentional
misconduct, fraud or a knowing violation of law or payments of dividends or
distributions in excess of the amount allowed. The reincorporation will result
in the elimination of any liability of an officer or director for a breach of
the duty of loyalty unless arising from intentional misconduct, fraud, or a
knowing violation of law.
Dividends. Utah law is substantially the same as Nevada law with
respect to when dividends may be paid or redemption of its shares. Under the
Utah law, unless further restricted in the Articles of Incorporation, a
corporation may pay dividends redeem or repurchase its shares only if, after
giving it effect: (a) the corporation would not be able to pay its debts as they
become due in the usual course of business; or (b) the corporation's total
assets would be less than the sum of its total liabilities plus. Nevada law
provides that no distribution (including dividends on, or redemption or
repurchases of, shares of capital stock) may be made if, after giving effect to
such distribution, the corporation would not be able to pay its debts as they
become due in the usual course of business, or, except as specifically permitted
by the articles of incorporation, the corporation's total assets would be less
than the sum of its total liabilities plus the amount that would be needed at
the time of a dissolution to satisfy the preferential rights of preferred
stockholders. The reincorporation does not significantly change the ability of
Aztec Nevada to pay dividends or other distributions that would be payable under
Utah law.
Restrictions on Business Combinations. Both Utah and Nevada law contain
provisions restricting the ability of a corporation to engage in business
combinations with an interested stockholder. Under Utah law, a corporation which
is listed on a national securities exchange, included for quotation on the
Nasdaq Stock Market or held of record by more than 2,000 stockholders, is not
permitted to engage in a business combination with any interested stockholder
for a three-year period following the time such stockholder became an interested
stockholder, unless (i) the transaction resulting in a person becoming an
interested stockholder, or the business combination, is approved by the board of
directors of the corporation before the person becomes an interested
stockholder; (ii) the interested stockholder acquires 85% or more of the
outstanding voting stock of the corporation in the same transaction that makes
it an interested stockholder (excluding shares owned by persons who are both
officers and directors of the corporation, and shares held by certain employee
stock ownership plans); or (iii) on or after the date the person becomes an
interested stockholder, the business combination is approved by the
corporation's board of directors and by the holders of at least 66 2/3% of the
corporation's outstanding voting stock at an annual or special meeting (and not
by written consent), excluding shares owned by the interested stockholder. Utah
law defines "interested stockholder" generally as a person who owns 15% or more
of the outstanding shares of a corporation's voting stock.
Nevada law regulates business combinations more stringently. First, an
"interested stockholder" is defined as a beneficial owner (directly or
indirectly) of ten percent (10%) or more of the voting power of the outstanding
shares of the corporation. Second, the three-year moratorium can be lifted only
by advance approval by a corporation's board of directors. Finally, after the
three-year period, combinations with "interested stockholders" remain prohibited
unless (i) they are approved by the board of directors, the disinterested
stockholders or a majority of the outstanding voting power not beneficially
owned by the interested party, or (ii) the interested stockholders satisfy
certain fair value requirements. A Nevada corporation may opt-out of the statute
with appropriate provisions in its articles of incorporation.
Neither the Aztec Utah, nor Aztec Nevada have opted out of the
applicable statutes and the more stringent requirements of Nevada law apply to
mergers and combinations after the Effective Date of the reincorporation.
Amendment to Articles of Incorporation or Bylaws. Both Utah and Nevada
law require the approval of the holders of a majority of all outstanding shares
entitled to vote to approve proposed amendments to a corporation's certificate
or articles of incorporation. Both Utah and Nevada law also provide that in
addition to the vote of the stockholders, the vote of a majority of the
outstanding shares of a class may be required to amend the Articles of
Incorporation or articles of incorporation. Neither state requires stockholder
approval for the board of directors of a corporation to fix the voting powers,
designation, preferences, limitations, restrictions and rights of a class of
stock provided that the corporation's organizational documents grant such power
to its board of directors. Both Utah and Nevada law permit the number of
authorized shares of any such class of stock to be increased or decreased (but
not below the number of shares then outstanding) by the board of directors
unless otherwise provided in the articles of incorporation or resolution adopted
pursuant to the Articles of Incorporation, respectively.
Actions by Written Consent of Stockholders. Both Utah and Nevada law
provide that, unless the articles or Articles of Incorporation provides
otherwise, any action required or permitted to be taken at a meeting of the
stockholders may be taken without a meeting if the holders of outstanding stock
having at least the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote consents
to the action in writing. Utah law requires the corporation to give prompt
notice of the taking of corporate action without a meeting by less than
unanimous written consent to those stockholders who did not consent in writing.
Nevada law does not require notice to the stockholders of action taken by less
than all of the stockholders.
Stockholder Vote for Mergers and Other Corporation Reorganizations.
Both jurisdictions require authorization by an absolute majority of the
outstanding voting rights, as well as approval by the board of directors, of the
terms of a merger or a sale of substantially all of the assets of the
corporation. Neither Utah nor Nevada law require a stockholder vote of the
surviving corporation in a merger (unless the corporation provides otherwise in
its Articles of Incorporation) if: (a) the merger agreement does not amend the
existing Articles of Incorporation of the surviving corporation; (b) each share
of stock of the surviving corporation outstanding immediately before the
effective date of the merger is an identical outstanding share after the merger;
and (c) either no shares of common stock of the surviving corporation and no
shares, securities or obligations convertible into such stock are to be issued
or delivered under the plan of merger, or the authorized unissued shares or
shares of common stock of the surviving corporation to be issued or delivered
under the plan of merger plus those initially issuable upon conversion of any
other shares, securities or obligations to be issued or delivered under such
plan do not exceed twenty percent (20%) of the shares of common stock of such
constituent corporation outstanding immediately prior to the effective date of
the merger.
DEFENSES AGAINST HOSTILE TAKEOVERS
The following discussion summarizes the reasons for, and the operation
and effects of, certain provisions in the Aztec Nevada Articles of Incorporation
which management has identified as potentially having an anti-takeover effect.
It is not intended to be a complete description of all potential anti-takeover
effects, and it is qualified in its entirety by reference to the Aztec Nevada
Articles of Incorporation. Similar provisions are not contained in the Aztec
Utah Articles of Incorporation. The reincorporation provides significant
anti-takeover provisions.
The anti-takeover provisions of the Aztec Nevada Articles of
Incorporation are designed to minimize the possibility of a sudden acquisition
of control of Aztec Nevada which has not been negotiated with and approved by
the Aztec Nevada board of directors. These provisions may tend to make it more
difficult to remove the incumbent members of the board of directors. The
provisions would not prohibit an acquisition of control of Aztec Nevada or a
tender offer for all of its capital stock. However, to the extent these
provisions successfully discourage the acquisition of control of Aztec Nevada or
tender offers for all or part of its capital stock without approval of the board
of directors, they may have the effect of preventing an acquisition or tender
offer which might be viewed by stockholders to be in their best interests.
Tender offers or other non-open market acquisitions of stock are
usually made at prices above the prevailing market price. In addition,
acquisitions of stock by persons attempting to acquire control through market
purchases may cause the market price of the stock to reach levels which are
higher than would otherwise be the case. Anti-takeover provisions may discourage
such purchases, particularly those of less than all of the outstanding capital
stock, and may thereby deprive stockholders of an opportunity to sell their
stock at a temporarily higher price. These provisions may therefore decrease the
likelihood that a tender offer will be made adversely affect those stockholders
who would desire to participate in a tender offer. These provisions may also
serve to insulate incumbent management from change and to discourage not only
sudden or hostile takeover attempts, but any attempts to acquire control which
are not approved by the board of directors, whether or not stockholders deem
such transactions to be in their best interests.
Authorized Shares of Capital Stock.
The Aztec Nevada Articles of Incorporation authorizes the issuance of
up to 20,000,000 shares of serial preferred stock, without any action on the
part of the stockholders. Shares of Aztec Nevada's serial preferred stock with
voting rights could be issued and would then represent an additional class of
stock required to approve any proposed acquisition. This preferred stock,
together with authorized but unissued shares of common stock (the Articles of
Incorporation authorizes the issuance of up 100,000,000 shares of common stock),
could represent additional capital stock required to be purchased by an
acquiror. If the board of directors of Aztec Nevada determined to issue an
additional class of voting preferred stock to a person opposed to a proposed
acquisition, such person might be able to prevent the acquisition
single-handedly.
Stockholder Meetings.
Nevada law provides that the annual stockholder meeting may be called
by a corporation's board of directors or by such person or persons as may be
authorized by a corporation's articles of incorporation or bylaws. The Aztec
Nevada Articles of Incorporation provides that annual stockholder meetings may
be called only by the Aztec Nevada board of directors or a duly designated
committee of the board. Although Aztec Nevada believes that this provision will
discourage stockholder attempts to disrupt the business of Aztec Nevada between
annual meetings, its effect may be to deter hostile takeovers by making it more
difficult for a person or entity to obtain immediate control of Aztec Nevada
Restriction of Maximum Number of Directors and Filling Vacancies on the Board
of Directors.
Nevada law requires that the board of directors of a corporation
consist of one or more members and that the number of directors shall be set by
or in the manner described in the corporation's articles of incorporation or
bylaws. Aztec Nevada's Articles of Incorporation provides that the number of
directors (exclusive of directors, if any, to be elected by the holders of
preferred stock) shall not be less than one or more than 15, as shall be
provided from time to time in accordance with the bylaws. The power to determine
the number of directors within these numerical limitations is vested in the
board of directors and requires the concurrence of at least two-thirds of the
entire board of directors. The effect of such provisions may be to prevent a
person or entity from quickly acquiring control of Aztec Nevada through an
increase in the number of the directors and election of nominees to fill the
newly created vacancies.
Advance Notice Requirements for Nomination of Directors and Proposal of New
Business at Annual Stockholder Meetings.
Aztec Nevada's Articles of Incorporation provide that any stockholder
desiring to make a nomination for the election of directors or a proposal for
new business at a stockholder meeting must submit written notice not less than
30 or more than 60 days in advance of the meeting. This advance notice
requirement may give management time to solicit its own proxies in an attempt to
defeat any dissident slate of nominations. Similarly, adequate advance notice of
stockholder proposals will give management time to study such proposals and to
determine whether to recommend to the stockholders that such proposals be
adopted. In certain instances, such provisions could make it more difficult to
oppose management's nominees or proposals, even if the stockholders believe such
nominees or proposals are in their interests. These provisions may tend to
discourage persons from bringing up matters disclosed in the proxy materials
furnished to the stockholders and could inhibit the ability of stockholders to
bring up new business in response to recent developments.
APPRAISAL RIGHTS
The reincorporation will be conducted as a merger of Aztec Utah into
our wholly owned subsidiary pursuant to the Utah Code. Nevada law does not
provide for any right of appraisal or redemption in connection with mergers of a
parent corporation into its subsidiary. The stockholders are not entitled to
receive consideration in lieu of the shares of Aztec Nevada.
PROPOSAL II
ELECTION OF DIRECTORS
We currently have three directors. The Board of Directors has
determined that it is in the Company's best interest, and has resolved, to
propose to the stockholders that three directors be elected to serve until the
next Annual Meeting of stockholders. Each director holds office until his
successor is elected and qualified or until his earlier death, resignation,
removal, or disqualification.
The three nominees for whom the enclosed proxy is intended to be voted
are set forth below. All nominees are now serving as our directors. Each of
these nominees has indicated his willingness to serve if elected. The Board of
Directors has no reason to believe that any of these nominees will be
unavailable for election, but if such a situation should arise, the proxy will
be voted in accordance with the best judgment of the proxyholder for such person
or persons as may be designated by the Board of Directors, unless the
stockholder has directed otherwise.
NOMINEES FOR DIRECTOR
L. Mychal Jefferson II, age 33, has served as a director since March
16, 2000.
Terry Roberts, age 33, has served as a director since November 29,
2000.
Monica W. Jefferson, age 26, has served as a director since March 16,
2000.
STATEMENT OF CORPORATE GOVERNANCE
Our Board of Directors held a total of seven meetings in fiscal 2003.
All directors attended at least seventy-five percent (75%) of all of the
meetings held by the Board of Directors.
Our Board of Directors considers all major decisions. The Board has not
established any standing or special committees.
Audit Committee. We have not established an audit committee because we
do not have adequate financial resources to engage a financial expert as defined
by Sarbanes-Oxley or purchase errors and omissions insurance to cover
independent directors.
Compensation Committee. We have not established a compensation
committee because we do not pay compensation.
MANAGEMENT
Our Directors and Executive Officers, their ages as of November 13, 2003
and certain additional information about them are as follows:
Name AGE Position
---- --- --------
L. Mychal Jefferson, II 35 Chairman of the Board of Directors, Chief Executive
Officer and President
Terry Roberts 35 Treasurer and Director
Monica W. Jefferson 28 Secretary and Director
L. Mychal Jefferson II, age 33, has served as Chairman of the Board,
Chief Executive Officer and President since March 16, 2000. Mr. Jefferson began
his career as an Investment Banker with Oppenheimer. Mr. Jefferson later founded
LM Jefferson and Company. He currently serves as an investor and outside board
member of various public and private companies.
Terry Roberts, age 33, has served as Treasurer and Director since
November 29, 2000. Mr. Robert serves as an investor, independent director and
is President of Roberts Co., Inc., a Texas based facility services firm.
Monica W. Jefferson, age 26, has served as Secretary and Director
since March 16, 2000. Mrs. Jefferson founded several executive office suites
and organizations.
Director and Executive Compensation. Since 1990, the Company has not
paid salaries or other form compensation to any of its officers or directors.
Security Ownership of Certain Beneficial Owners and Management. The
following table presents certain information regarding the beneficial ownership
of all shares of the Common Stock at July 25, 2003: (i) each person who owns
beneficially more than five percent of the outstanding shares of the Common
Stock, (ii) each director of the Company, (iii) each named executive officer,
and (iv) all directors and officers as a group. The percentage of shares owned
provided in the table is based on 7,374,050 shares outstanding as of July 25,
2003. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, the persons
named in the table have sole voting and investment power with respect to all
shares of common stock shown as beneficially owned by them. The determination of
whether these persons have sole voting and investment power is based on
information provided by them.
Shares Beneficially Owned
Name of Beneficial Owner (1) Number Percent(2)
---------------------------- ------ ----------
L. Mychal Jefferson, II 97,500 1.32%
Terry Roberts 10,000 .001%
Monica Jefferson 10,000 .001%(3)
------ --------
All directors and officers as a group 117,500 1.34%
======= =====
(1) Unless otherwise indicated, each person named in the above-described
table has the sole voting and investment power with respect to his
shares of the Common Stock beneficially owned.
(2) Unless otherwise provided, the calculation of percentage ownership is
based on the total number of shares of the Common
Stock outstanding as of July 25, 2003.
(3) Mrs. Jefferson is the wife of L. Mychal Jefferson. Mr. Jefferson
disclaims any beneficial ownership in the shares owned by
his wife.
Equity Plan Information. We have not adopted any form of Equity Plan.
Employee Stock Option Plans. We have not adopted a Stock Option Plan.
Certain Transactions. Neither members of Aztec's Board of Directors nor
any executive officers of Aztec are shareholders and/or directors in other
companies with which Aztec has business relationships.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that our executive officers and directors, and beneficial owners of more than
ten percent (10%) of any class of equity security registered pursuant to the
Securities Act of 1933, as amended, make certain filings with the SEC and the
Company. We do not believe, based on information provided to us by the reporting
persons, that during or since the fiscal year ended August 31, 2000, any
directors, officers or ten percent (10%) beneficial owners timely complied with
such filing requirements.
PROPOSAL III
RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has selected Gwendolyn J.
Giles CFE, CPA as Aztec's independent public accountants for the fiscal year
ending August 31, 2004. Gwendolyn J. Giles CFE, CPA has audited Aztec's
financial statements since fiscal 1999.
Fees billed to Aztec by Gwendolyn J. Giles CFE, CPA during Fiscal 2003
Audit Fees: During Aztec's 2003 fiscal year, Gwendolyn J. Giles CFE,
CPA billed Aztec $4,150 in Audit fees for review of the Company's annual
financial statements and those financial statements included in the Company's
quarterly reports on Form 10-Q.
Financial Information Systems Design and Implementation Fees: Aztec did
not engage Gwendolyn J. Giles CFE, CPA to provide services to Aztec regarding
financial information systems design and implementation during the fiscal year
ended August 31, 2003.
All Other Fees: During Aztec's 2003 fiscal year, Gwendolyn J. Giles
CFE, CPA billed Aztec $0 in fees for all other non-audit services rendered to
Aztec, which amount includes tax related services of $0, foreign statutory
audits of $0.
The Aztec Board of Directors believes that the provision of the
services described under "All other Fees" was compatible with maintaining
Gwendolyn J. Giles CFE, CPA's independence from Aztec.
Stockholder Ratification and Board Recommendation
Stockholder ratification of the selection of Gwendolyn J. Giles CFE,
CPA as Aztec's independent public accountant is not required by Aztec's By-Laws
or other applicable legal requirement. However, the Board is submitting the
selection of Gwendolyn J. Giles CFE, CPA to the stockholders for ratification as
a matter of good corporate practice. If the stockholders fail to ratify the
selection, the Audit Committee will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee at its discretion
may direct the appointment of a different independent accounting firm at any
time during the year if it determines that such a change would be in the best
interests of Aztec and its stockholders.
Adoption of Proposal Three requires approval by the holders of a
majority of shares of common stock present in person or represented by proxy,
and entitled to vote at the annual meeting. Abstentions may be specified on this
proposal to ratify the selection of the independent auditors. Abstentions will
be considered present and entitled to vote at the annual meeting. Abstentions
will have the effect of a vote for this proposal to ratify the selection of the
independent auditors.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
NO INCORPORATION BY REFERENCE; NO SOLICITATION
In Aztec's filings with the SEC, information is sometimes "incorporated
by reference." This means that we are referring you to information that has
previously been filed with the SEC, so the information should be considered as
part of the filing that you are reading. Based on SEC regulations, the
performance graph of this proxy statement, the "Audit Committee Report" and the
"Compensation Committee Report" specifically are not incorporated by reference
into any other filings with the SEC or deemed filed with the SEC under the
Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended.
This proxy statement is sent to you as part of the proxy materials for
the Annual Meeting of Stockholders. You may not consider this proxy statement as
material for soliciting the purchase or sale of Aztec's common stock.
OTHER MATTERS
We know of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your stock be represented at the meeting,
regardless of the number of shares that you hold. You are, therefore, urged to
execute and return the accompanying proxy in the envelope, which has been
enclosed, at your earliest convenience.
FOR THE BOARD OF DIRECTORS,
/s/L. Mychal Jefferson, II
--------------------------------
L. Mychal Jefferson, II, President and Chief Executive Officer
Dated: December 10, 2003
EXHIBIT A
PLAN AND AGREEMENT OF MERGER
OF
AZTEC COMMUNICATIONS GROUP, INC.
(a Utah corporation)
AND
AZTEC COMMUNICATIONS GROUP, INC.
(a Nevada corporation)
PLAN AND AGREEMENT OF MERGER entered into on October 25, 2003 by
Aztec Communications Group, Inc., a Utah corporation ("Aztec Utah"), and
approved by resolution adopted by its Board of Directors on said date, and
entered into on October 25, 2003, by Aztec Communications Group, Inc., a Nevada
corporation ("Aztec Nevada"), and approved by resolution adopted by its Board of
Directors on said date.
WHEREAS, Aztec Utah is a business corporation of the State of Utah;
WHEREAS, Aztec Nevada is a business corporation of the State of Nevada;
WHEREAS, the Utah Business Corporation Act permits a merger of a
business corporation of the State of Utah with and into a business corporation
of another jurisdiction;
WHEREAS, Aztec Utah does not intend to carry on any business except the
business necessary to wind up and liquidate its business and affairs by means of
a merger with and into a business corporation of the State of Nevada; and
WHEREAS, Aztec Utah and Aztec Nevada and the respective Boards of
Directors thereof declare it advisable and to the advantage, welfare, and best
interests of said corporations and their respective stockholders to merge Aztec
Utah with and into Aztec Nevada pursuant to the provisions of the Utah Business
Corporation Act and pursuant to the provisions of the Nevada Revised Statutes
upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being thereunto duly entered into by Aztec Utah
and approved by a resolution adopted by its Board of Directors and being
thereunto duly entered into by Aztec Nevada and approved by a resolution adopted
by its Board of Directors, the Merger and the terms and conditions thereof and
the mode of carrying the same into effect, are hereby determined and agreed upon
as hereinafter in this Plan and Agreement of Merger set forth.
1. Aztec Utah shall, pursuant to the provisions of the Utah
Business Corporation Act and to the provisions of the Nevada
Revised Statutes, be merged with and into Aztec Nevada, which
shall be the surviving corporation from and after the
effective time of the merger and which is sometimes
hereinafter referred to as the "surviving corporation", and
which shall continue to exist as said surviving corporation
under its present name pursuant to the provisions of the
Nevada Revised Statutes. The separate existence of Aztec Utah,
which is sometimes hereinafter referred to as the "terminating
corporation", shall cease at said effective time in accordance
with the provisions of the Utah Business Corporation Act.
2. The present Articles of Incorporation of the surviving
corporation will be the Articles of Incorporation of the
surviving corporation and will continue in full force and
effect until changed, altered, or amended as therein provided
and in the manner prescribed by the provisions of the Nevada
Revised Statutes.
3. The present bylaws of the surviving corporation will be the
bylaws of said surviving corporation and will continue in full
force and effect until changed, altered, or amended as therein
provided and in the manner prescribed by the provisions of the
Nevada Revised Statutes.
4. The directors and officers in office of the surviving
corporation at the effective time of the merger shall be the
members of the Board of Directors and the officers of the
surviving corporation, all of whom shall hold their
directorships and offices until the election and qualification
of their respective successors or until their tenure is
otherwise terminated in accordance with the by-laws of the
surviving corporation.
5. Each issued share of the common stock of the terminating
corporation shall, from and after the effective time of the
merger, be converted into one (1) share of the common stock of
the surviving corporation. The surviving corporation shall not
issue any certificate or script representing a fractional
share of common stock but shall instead issue on full share
for any fractional interest arising from the Merger. Pursuant
to the laws of the State of Nevada, each share of the
terminating corporation shall be tendered to the surviving
corporation for exchange into shares of the surviving
corporation within 60 days after the effective time of the
merger. Upon receipt of such shares of the terminating
corporation, the surviving corporation shall issue a
certificate for the whole shares of the surviving corporation
that are issuable in exchange for the shares of the
terminating corporation. The shares of the surviving
corporation that are outstanding immediately prior to the
effect time of the merger shall be cancelled and deemed not
outstanding as of the effective time of the merger.
6. The surviving corporation may sue in any court with
jurisdiction to cause any stockholder of the terminating
corporation to tender certificates representing shares owned
by such stockholder to be tendered to the surviving
corporation for exchange. Stockholders of the terminating
corporation shall have no rights to notices, distributions or
voting with respect to the surviving corporation unless the
certificates representing shares of the terminating
corporation are tendered to the surviving corporation for
exchange.
7. Except to the extent otherwise provided in the terms of
outstanding options, warrants or other rights to purchase, or
securities convertible into or exchangeable for common stock
of the terminating corporation (other than shares of the
preferred stock of the terminating corporation), each
outstanding option, warrant or other right to purchase, and
each outstanding security convertible into or exchangeable for
common stock shall be converted into an option, warrant or
other right to purchase, or security convertible into or
exchangeable for common stock of the surviving corporation on
the basis of one (1) share of the common stock of the
surviving corporation for each share of common stock of the
terminating corporation. The exercise price or conversion
ratio set forth in such option, warrant or other right to
purchase, or security convertible into or exchangeable for
common stock of the surviving corporation shall be ratably
adjusted so that the total exercise or conversion price shall
be the same as under the option, warrant, or other right to
purchase, or security convertible into or exchangeable for
common stock of the terminating corporation.
8. In the event that this Plan and Agreement of Merger shall have
been fully approved and adopted upon behalf of the terminating
corporation in accordance with the provisions of the Utah
Business Corporation Act and upon behalf of the surviving
corporation in accordance with the provisions of the Nevada
Revised Statutes, the said corporations agree that they will
cause to be executed and filed and recorded any document or
documents prescribed by the laws of the State of Utah and by
the laws of the State of Nevada, and that they will cause to
be performed all necessary acts within the State of Utah and
the State of Nevada and elsewhere to effectuate the merger
herein provided for.
9. The Board of Directors and the proper officers of the
terminating corporation and of the surviving corporation are
hereby authorized, empowered, and directed to do any and all
acts and things, and to make, execute, deliver, file, and
record any and all instruments, papers, and documents which
shall be or become necessary, proper, or convenient to carry
out or put into effect any of the provisions of this Plan and
Agreement of Merger or of the merger herein provided for.
10. The effective time of this Plan and Agreement of Merger, and
the time at which the merger herein agreed shall become
effective in the State of Utah and the State of Nevada, shall
be on the last to occur of:
(a) the approval of this Plan and Agreement of Merger by the
stockholders of the terminating corporation in accordance with
the Utah Business Corporation Act; or
(b) the date this Plan and Agreement of Merger, or a certificate
of merger meeting the requirements of the Nevada Revised
Statutes, is filed with the Secretary of State of the State of
Nevada; or
(c) the date this Plan and Agreement of Merger, or a certificate
of merger meeting the requirements of the Utah Revised
Statutes, is filed with the Secretary of State of the State of
Utah.
11. Notwithstanding the full approval and adoption of this Plan
and Agreement of Merger, the said Plan and Agreement of Merger
may be terminated at any time prior to the filing thereof with
the Secretary of State of the State of Nevada.
12. Notwithstanding the full approval and adoption of this Plan
and Agreement of Merger, the said Plan and Agreement of Merger
may be amended at any time and from time to time prior to the
filing thereof with the Secretary of State of the State of
Utah and at any time and from time to time prior to the filing
of any requisite merger documents with the Secretary of State
of the State of Nevada except that, without the approval of
the stockholders of Aztec Utah and the stockholders of Aztec
Nevada, no such amendment may (a) change the rate of exchange
for any shares of Aztec Utah or the types or amounts of
consideration that will be distributed to the holders of the
shares of stock of Aztec Utah; (b) change any term of the
Articles of Incorporation of the surviving corporation; or (c)
adversely affect any of the rights of the stockholders of
Aztec Utah or Aztec Nevada.
IN WITNESS WHEREOF, this Plan and Agreement of Merger is hereby
executed upon behalf of each of the constituent corporations parties thereto.
Dated: _____________________ AZTEC COMMUNICATIONS GROUP, INC.
a Utah corporation
By: _______________________________
L. Mychal Jefferson, II,
President and Chief Executive Officer
AZTEC COMMUNICATIONS GROUP, INC.
a Nevada corporation
By: _______________________________
L. Mychal Jefferson, II,
President and Chief Executive Officer
EXHIBIT B
ARTICLES OF INCORPORATION
OF
AZTEC COMMUNICATIONS GROUP, INC.
For the purpose of associating to establish a corporation under the
provisions and subject to the requirements of Title 7, Chapter 78 of Nevada
Revised Statutes, and the acts amendatory thereof, and hereinafter sometimes
referred to as the General Corporation Law of the State of Nevada, the
undersigned incorporator does hereby adopt and make the following Articles of
Incorporation:
ARTICLE I
NAME
The name of the Corporation is Aztec Communications Group, Inc.
(hereinafter, the "Corporation").
ARTICLE II
REGISTERED OFFICE AND AGENT
The name of the Corporation's resident agent in the State of Nevada is
The Corporation Trust Company of Nevada, and the street address of the said
resident agent where process may be served on the Corporation is One East First
Street, Reno, Washoe County, Nevada 89501. The mailing address and the street
address of the said resident agent are identical.
ARTICLE III
POWERS
The purpose for which the Corporation is organized is to transact all
lawful business for which corporations may be incorporated pursuant to the laws
of the State of Nevada. The Corporation shall have all the powers of a
corporation organized under the General Corporation Law of the State of Nevada.
ARTICLE IV
TERM
The Corporation is to have perpetual existence.
ARTICLE V
CAPITAL STOCK
The aggregate number of shares of all classes of capital stock which
the Corporation has authority to issue is 120,000,000 of which 100,000,000 are
to be shares of common stock, $.001 par value per share, and of which 20,000,000
are to be shares of serial preferred stock, $.001 par value per share. The
shares may be issued by the Corporation from time to time as approved by the
board of directors of the Corporation without the approval of the stockholders
except as otherwise provided in this Article V or the rules of a national
securities exchange if applicable. The consideration for the issuance of the
shares shall be paid to or received by the Corporation in full before their
issuance and shall not be less than the par value per share. The consideration
for the issuance of the shares shall be tangible or intangible property or
benefit to the Corporation, including but not limited to cash, promissory notes,
services rendered, contracts for services to be rendered, securities of the
Corporation, personal property, real property, leases of real property or any
combination of the foregoing. In the absence of actual fraud in the transaction,
the judgment of the board of directors as to the value of such consideration
shall be conclusive. Upon payment of such consideration such shares shall be
deemed to be fully paid and non-assessable. In the case of a stock dividend, the
part of the surplus of the Corporation which is transferred to stated capital
upon the issuance of shares as a stock dividend shall be deemed to be the
consideration for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series (if
any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:
A. Common Stock. Except as provided in these Articles, the holders of
the common stock shall exclusively posses all voting power. Subject to the
provisions of these Articles, each holder of shares of common stock shall be
entitled to one vote for each share held by such holders. Whenever there shall
have been paid, or declared and set aside for payment, to the holders of the
outstanding shares of any class or series of stock having preference over the
common stock as to the payment of dividends, the full amount of dividends and
sinking fund or retirement fund or other retirement payments, if any, to which
such holders are respectively entitled in preference to the common stock, then
dividends may be paid on the common stock, and on any class or series of stock
entitled to participate therewith as to dividends, out of any assets legally
available for the payment of dividends, but only when and as declared by the
board of directors of the Corporation. In the event of any liquidation,
dissolution or winding up of the Corporation, after there shall have been paid,
or declared and set aside for payment, to the holders of the outstanding shares
of any class having preference over the common stock in any such event, the full
preferential amounts to which they are respectively entitled, the holders of the
common stock and of any class or series of stock entitled to participate
therewith, in whole or in part, as to distribution of assets shall be entitled,
after payment or provision for payment of all debts and liabilities of the
Corporation, to receive the remaining assets of the Corporation available for
distribution, in cash or in kind. The Corporation may issue one or more series
of common stock, each of which shall have such relative rights with respect to
dividends and liquidations as set forth in a resolution or resolutions adopted
by the board of directors of the Corporation. Each share of each series of
common stock shall have the same relative powers, preferences and rights as, and
shall be identical in all respects with, all the other shares of the Corporation
of the same series.
B. Serial Preferred Stock. Except as provided in these Articles, the
board of directors of the Corporation is authorized, by resolution or
resolutions from time to time adopted, to provide for the issuance of serial
preferred stock in series and to fix and state the powers, designations,
preferences and relative, participating, optional or other special rights of the
shares of each such series, and the qualifications, limitation or restrictions
thereof, including but not limited to determination of any of the following:
(1) the distinctive serial designation and the number of
shares constituting such series;
(2) the rights in respect of dividends, if any, to be paid on
the shares of such series, whether dividends shall be cumulative and,
if so, from which date or dates, the payment or date or dates for
dividends, and the participating or other special rights, if any, with
respect to dividends;
(3) the voting powers, full or limited, if any, of the shares
of such series;
(4) whether the shares of such series shall be redeemable and,
if so, the price or prices at which, and the terms and conditions upon
which such shares may be redeemed;
(5) the amount or amounts payable upon the shares of such
series in the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
(6) whether the shares of such series shall be entitled to the
benefits of a sinking or retirement fund to be applied to the purchase
or redemption of such shares, and, if so entitled, the amount of such
fund and the manner of its application, including the price or prices
at which such shares may be redeemed or purchased through the
application of such funds;
(7) whether the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or classes or any
other series of the same or any other class or classes of stock of the
Corporation and, if so convertible or exchangeable, the conversion
price or prices, or the rate or rates of exchange, and the adjustments
thereof, if any, at which such conversion or exchange may be made, and
any other terms and conditions of such conversion or exchange;
(8) the subscription or purchase price and form of
consideration for which the shares of such series shall be issued; and
(9) whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued shares of
serial preferred stock and whether such shares may be reissued as
shares of the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of the Corporation of the same series,
except the times from which dividends on shares which may be issued from time to
time of any such series may begin to accrue.
ARTICLE VI
PREEMPTIVE RIGHTS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock or carrying any right to purchase
stock may be issued pursuant to resolution of the board of directors of the
Corporation to such persons, firms, corporations or associations, whether or not
holders thereof, and upon such terms as may be deemed advisable by the board of
directors in the exercise of its sole discretion.
ARTICLE VII
REPURCHASE OF SHARES
The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences or indebtedness, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.
ARTICLE VIII
MEETINGS OF STOCKHOLDERS; CUMULATIVE VOTING
A. No action that is required or permitted to be taken by the
stockholders of the Corporation at any annual or special meeting of stockholders
may be effected by written consent of stockholders in lieu of a meeting of
stockholders, unless the action to be effected by written consent of
stockholders and the taking of such action by such written consent have
expressly been approved in advance by the board of directors of the Corporation.
B. Special meeting of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the board of directors of the
Corporation, or by a committee of the board of directors which as been duly
designated by the board of directors and whose powers and authorities, as
provided in a resolution of the board of directors or in the bylaws of the
Corporation, include the power and authority to call such meetings but such
special meetings may not be called by another person or persons.
C. There shall be no cumulative voting by stockholders of any class or
series in the election of directors of the Corporation.
D. Meetings of stockholders may be held at such place as the bylaws may
provide.
ARTICLE IX
NOTICE FOR NOMINATIONS AND PROPOSALS
A. Nominations for the election of directors and proposals for any new
business to be taken up at any annual or special meeting of stockholders may be
made by the board of directors of the Corporation or by any stockholder of the
Corporation entitled to vote generally in the election of directors. In order
for a stockholder of the Corporation to make any such nominations and/or
proposals at an annual meeting or such proposals at a special meeting, he or she
shall give notice thereof in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the Corporation of less than
thirty days nor more than sixty days prior to any such meeting; provided,
however, that if less than forty days' notice of the meeting is given to
stockholders, such written notice shall be delivered or mailed, as prescribed,
to the Secretary of the Corporation not later than the close of the tenth day
following the day on which notice of the meeting was mailed to stockholders.
Each such notice given by a stockholder with respect to nominations for the
election of directors shall set forth (1) the name, age, business address and,
if known, residence address of each nominee proposed in such notice, (2) the
principal occupation or employment of each such nominee, and (3) the number of
shares of stock of the Corporation which are beneficially owned by each such
nominee. In addition, the stockholder making such nomination shall promptly
provide any other information reasonably requested by the Corporation.
B. Each such notice given by a stockholder to the Secretary with
respect to business proposals to bring before a meeting shall set forth in
writing as to each matter: (1) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting; (2) the name and address, as they appear on the Corporation's books, of
the stockholder proposing such business; (3) the class and number of shares of
the Corporation which are beneficially owned by the stockholder; and (4) any
material interest of the stockholder in such business. Notwithstanding anything
in these Articles to the contrary, no business shall be conducted at the meeting
except in accordance with the procedures set forth in this Article.
C. The Chairman of the annual or special meeting of stockholders may,
if the facts warrant, determine and declare to such meeting that a nomination or
proposal was not made in accordance with the foregoing procedure, and, if he
should so determine, he shall so declare to the meeting and the defective
nomination or proposal shall be disregarded and laid over for action at the next
succeeding adjourned, special or annual meeting of the stockholders taking place
thirty days or more thereafter. This provision shall not require the holding of
any adjourned or special meeting of stockholders for the purpose of considering
such defective nomination or proposal.
ARTICLE X
DIRECTORS
A. Initial Board of Directors. The initial board of directors shall
consist of three persons, who shall serve until the initial meeting of directors
and the election of their respective replacements. The initial directors shall
be
L. Mychal Jefferson II
3730 Kirby, Suite 1200, Houston, Texas 77098
Terry Roberts
3730 Kirby, Suite 1200, Houston, Texas 77098
Monica W. Jefferson
3730 Kirby, Suite 1200, Houston, Texas 77098
B. Number; Vacancies. The number of directors of the Corporation shall
be such number, not less than one nor more than 15 (exclusive of directors, if
any, to be elected by holders of preferred stock of the Corporation), as shall
be provided from time to time in a resolution adopted by the board of directors,
provided that no decrease in the number of directors shall have the effect of
shortening the term of any incumbent director, and provided further that no
action shall be taken to decrease or increase the number of directors from time
to time unless at least two-thirds of the directors then in office shall concur
in said action. Exclusive of directors, if any, elected by holders of preferred
stock, vacancies in the board of directors of the Corporation, however caused,
and newly created directorships shall be filled by a vote of two-thirds of the
directors then in office, whether or not a quorum, and any director so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of the class to which the director has been chosen expires and
when the director's successor is elected and qualified. The board of directors
shall be classified in accordance with the provisions of Section B of this
Article X.
C. Classified Board. The board of directors of the Corporation (other
than directors which may be elected by the holders of preferred stock) shall be
divided into three classes of directors which shall be designated Class I, Class
II and Class III. The members of each class shall be elected for a term of three
years and until their successors are elected and qualified. Such classes shall
be as nearly equal in number as the then total number of directors constituting
the entire board of directors shall permit, exclusive of directors, if any,
elected by holders of preferred stock, with the terms of office of all members
of one class expiring each year. Should the number of directors not be equally
divisible by three, the excess director or directors shall be assigned to
Classes I or II as follows: (1) if there shall be an excess of one directorship
over the number equally divisible by three, such extra directorship shall be
classified in Class I; and (2) if there be an excess of two directorships over a
number equally divisible by three, one shall be classified in Class I and the
other in Class II. At the first meeting of the board of directors of the
Corporation, directors of Class I shall be elected to hold office for a term
expiring at the first annual meeting of stockholders, directors of Class II
shall be elected to hold office for a term expiring at the second succeeding
annual meeting of stockholders and directors of Class III shall be elected to
hold office for a term expiring at the third succeeding annual meeting
thereafter. Thereafter, at each succeeding annual meeting, directors of each
class shall be elected for three-year terms. Notwithstanding the foregoing, the
director whose term shall expire at any annual meeting shall continue to serve
until such time as his successor shall have been duly elected and shall have
qualified unless his position on the board of directors shall have been
abolished by action taken to reduce the size of the board of directors prior to
said meeting.
D. Increase and Reduction in Directors. Should the number of directors
of the Corporation be reduced, the directorship(s) eliminated shall be allocated
among classes as appropriate so that the number of directors in each class is as
specified in the position(s) to be abolished. Notwithstanding the foregoing, no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director. Should the number of directors of the Corporation be
increased, other than directors which may be elected by the holders of preferred
stock, the additional directorships shall be allocated among classes as
appropriate so that the number of directors in each class is as specified in the
immediately preceding paragraph.
E. Directors Elected by Preferred Stockholders. Whenever the holders of
any one or more series of preferred stock of the Corporation shall have the
right, voting separately as a class, to elect one or more directors of the
Corporation, the board of directors shall include said directors so elected in
addition to the number of directors fixed as provided in this Article X.
Notwithstanding the foregoing, and except as otherwise may be required by law,
whenever the holders of any one or more series of preferred stock of the
Corporation elect one or more directors of the Corporation, the terms of the
director or directors elected by such holders shall expire at the next
succeeding annual meeting of stockholders.
ARTICLE XI
REMOVAL OF DIRECTORS
Notwithstanding any other provision of these Articles or the bylaws of
the Corporation, any director or all the directors of a single class (but not
the entire board of directors) of the Corporation may be removed, at any time,
but only for cause and only by the affirmative vote of the holders of at least
75% of the voting power of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as one class) cast at a meeting of the stockholders called for
that purpose. Notwithstanding the foregoing, whenever the holders of any one or
more series of preferred stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
preceding provisions of this Article XI shall not apply with respect to the
director or directors elected by such holders of preferred stock.
ARTICLE XII
ACQUISITION OF CAPITAL STOCK
A. Definitions. For the purpose of this Article:
(1) The term "Act" shall mean the Securities Exchange Act of
1934, as amended, and any successor statute.
(2) The term "acting in concert" shall mean (i) knowing
participation in a joint activity or conscious parallel action towards
a common goal whether or not pursuant to an express agreement, and (ii)
a combination or pooling of voting or other interest in the
Corporation's outstanding shares of capitol stock for a common purpose,
pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise.
(3) The term "acquire," "acquisition" or "acquiring" with
respect to the acquisition of any security of the Corporation shall
refer to the acquisition of such security by any means whatsoever,
including without limitation, an acquisition of such security by gift,
by operation of law, by will or by intestacy, whether voluntarily or
involuntarily.
(4) The term "Code" means the Internal Revenue Code of 1986,
as amended, and any successor statute.
(5) The term "Common Stock" means all Common Stock of the
Corporation and any other securities issued by the Corporation which
are treated as stock for purposes of Section 382 of the Code.
(6) The term "Fair Market Value" of the Common Stock shall
mean the average of the daily closing prices of the Common Stock for 15
consecutive trading days commencing 20 trading days before the date of
such computation. The closing price is the last reported sale price on
the principal securities exchange on which the Common Stock is listed
or, if the Common Stock is not listed on any national securities
exchange, the NASDAQ National Marked System, or, if the Common Stock is
not designated for trading on the NASDAQ National Market System, the
average of the closing bid and asked prices as reported on NASDAQ or,
if not so reported, as furnished by the National Quotation Bureau
Incorporated. In the absence of such a quotation, the Corporation shall
determine the current market price on a reasonable and appropriate
basis of the average of the daily closing prices for 15 consecutive
trading days commencing 20 trading days before the date of such
computation.
(7) The term "own," "owing," "ownership" or "owning" refer to
the ownership of securities within the meaning of Section 382 of the
Code after taking into account the attribution rules of Section
382(l)(3) of the Code and the regulations promulgated hereunder.
(8) The term "Person" shall mean any individual, firm,
corporation, partnership, joint venture or other entity and shall
include any group composed of such person and any other person with
whom such person or any Affiliate or Associate (as those terms are
defined in Rule 12b-2 of the General Rules and Regulations under the
Act) of such person has any agreement, arrangement or understanding,
directly or indirectly, for the purposes of acquiring, holding, voting
or disposing of Common Stock, and any other person who is a member of
such group.
(9) The term "Transfer Agent" shall mean the transfer agent
with respect to the Common Stock nominated and appointed by the board
of directors from time to time.
B. Acquisition of Control Shares.
(1) If, at any time during the ten years from the effective
date of these Articles, any Person shall acquire the beneficial
ownership (as determined pursuant to Rules 13d-3 and 13d-5 under the
Act) of more than 20% of any class of Common Stock, then the record
holders of Common Stock beneficially owned by such acquiring Person
shall have only the voting rights set forth in this paragraph B on any
matter requiring their vote or consent. With respect to each vote in
excess of 20% of the voting power of the outstanding shares of Common
Stock which such record holders would otherwise be entitled to cast
without giving effect to this paragraph B, the record holders in the
aggregate shall be entitled to cast only one-hundredth of a vote. A
Person who is a record owner of shares of Common Stock that are
beneficially owned simultaneously by more than one person shall have,
with respect to such shares, the right to cast the least number of
votes that such person would be entitled to cast under this paragraph B
by virtue of such shares being so beneficially owned by any of such
acquiring Persons. The effect of the reduction in voting power required
by this paragraph B shall be given effect in determination the presence
of a quorum for purposes of convening a meeting of the stockholders of
the Corporation.
(2) The limitation on voting rights prescribed by this
paragraph B shall terminate and be of no force and effect as of the
earliest to occur of: (i) the date that any person becomes the
beneficial owner of shares of stock representing at least 75% of the
total number of votes entitled to be cast in respect of all outstanding
shares of stock, before giving effect to the reduction in votes
prescribed by this paragraph B; or (ii) the date (the "Reference Date")
one day prior to the date on which, as a result of such limitation of
voting rights, the Common Stock will be delisted from (including by
ceasing to be temporarily or provisionally authorized for listing with)
the New York Stock Exchange (the "NYSE") or the American Stock Exchange
(the "AMEX"), or be no longer authorized for inclusion (including by
ceasing to be provisionally or temporarily authorized for inclusion) on
the National Association of Securities Dealers, Inc. Automated
Quotation System/National Market System ("NASDAQ/NMS"); provided,
however, that (a) such termination shall not occur until the earlier of
(x) the 90th day after the Reference Date or (y) the first day on or
after a Reference Date that there is not pending a proceeding under the
rules of the NYSE, the AMEX or the NASDAQ/NMS or any other
administrative or judicial proceeding challenging such delisting or
removal of authorization of the Common Stock, an application for
listing of the Common stock with the NYSE or the AMEX or for
authorization for the Common Stock to be including on the NASDAQ/NMS,
or an appeal with respect to any such application, and (b) such
termination shall not occur by virtue of such delisting or lack of
authorization if on or prior to the earlier of the 90th day after the
Reference Date or the day on which no proceeding, application or appeal
of the type described in (y) above is pending, the Common Stock is
approved for listing or continued listing on the NYSE or the AMEX or
authorized for inclusion or continued inclusion on the NASDAQ/NMS
(including any such approval or authorization which is temporary or
provisional). Nothing contained herein shall be construed so as to
prevent the Common Stock from continuing to be listed with the NYSE or
AMEX or continuing to be authorized for inclusion on the NASDAQ/NMS in
the event that the NYSE, AMEX or NASDAQ/NMS, as the case may be, adopts
a rule or is governed by an order, decree, ruling or regulation of the
Securities and Exchange Commission which provides in whole or in part
that companies having Common Stock with differential voting rights
listed on the NYSE or the Amex or authorized for inclusion on the
NASDAQ/NMS may continue to be so listed or included.
C. Exceptions. The restrictions contained in this Article XII shall not
apply to (1) any underwriter or member of an underwriting or selling group
involving a public sale or resale of securities of the Corporation or a
subsidiary thereof; provided, however, that upon completion of the sale or
resale of such securities, no such underwriter or member of such selling group
is a beneficial owner of more than 4.9% of any class of equity security of the
Corporation, (2) any revocable proxy granted pursuant to a proxy solicitation in
compliance with section 14 of the Act by a stockholder of the Corporation or (3)
any employee benefit plans of the Corporation. In addition, the Continuing
Directors of the Corporation, the officers and employees of the Corporation and
its subsidiaries, the directors of subsidiaries of the Corporation, the employee
benefit plans of the Corporation and its subsidiaries, entities organized or
established by the Corporation or any subsidiary thereof pursuant to the terms
of such plans and trustees and fiduciaries with respect to such plans acting in
such capacity shall not be deemed to be a group with respect to their beneficial
ownership of voting stock of the Corporation solely by virtue of their being
directors, officers or employees of the Corporation or a subsidiary thereof or
by virtue of the Continuing Directors of the Corporation, the officers and
employees of the Corporation and its subsidiaries and the directors of
subsidiaries of the Corporation being fiduciaries or beneficiaries of an
employee benefit plan of the Corporation or a subsidiary of the Corporation.
Notwithstanding the foregoing, no director, officer or employee of the
Corporation or any of its subsidiaries or group of any of them shall be exempt
from the provisions of this Article XII should any such person or group become a
beneficial owner of more than 20% of any class of equity security of the
Corporation.
D. Construction. A majority of the Continuing Directors, as defined in
Article XIII, shall have the power to construe and apply the provisions of
paragraphs B, C and D of this Article XII and to make all determinations
necessary or desirable to implement such provisions, including but not limited
to matters with respect to (1) the number of shares beneficially owned by any
person, (2) whether a person has an agreement, arrangement or understanding with
another as to the matters referred to in the definition of beneficial ownership,
(3) the application of any other definition or operative provision of this
Article XII to the given facts or (4) any other matter relating to the
applicability or effect of paragraphs B, C and D of this Article XII. Any
constructions, applications, or determinations made by the Continuing Directors
pursuant to paragraphs B, C and D of this Article XII in good faith and on the
basis of such information and assistance as was then reasonably available for
such purpose shall be conclusive and binding upon the Corporation and its
stockholders.
E. Partial Invalidity. If any provision of this Article XII or any
application of any such provision is determined to be invalid by any federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
ARTICLE XIII
APPROVAL OF CERTAIN BUSINESS COMBINATIONS
The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this section.
A. (1) Except as otherwise expressly provided in this Article
XIII, and in addition to any other vote required by law, the
affirmative vote required by law, the affirmative vote of the holders
of (i) at least 75% of the voting power of the outstanding shares
entitled to vote thereon (and, if any class or series of shares is
entitled to vote thereon separately the affirmative vote of the holders
of at least 75% of the outstanding shares of each such class or
series), and (ii) at least a majority of the outstanding shares
entitled to vote thereon, not including shares deemed beneficially
owned by a Related Person (as hereinafter defined), shall be required
in order to authorize (a) any merger or consolidation of the
Corporation or a subsidiary of the Corporation with or into a Related
person (as hereinafter defined); (b) any sale, lease, exchange,
transfer or other disposition, including without limitation, a mortgage
or pledge, of all or any Substantial Part (as hereinafter defined) of
the assets of the Corporation (including without limitation any voting
securities of a subsidiary) or of a subsidiary, to a Related Person;
(c) any merger or consolidation of a Related Person with or into the
Corporation or a subsidiary of the Corporation; (d) any sale, lease,
exchange, transfer or other disposition of all or any Substantial Part
of the assets of a Related Person to the Corporation or a subsidiary of
the Corporation; (e) the issuance of any securities of the Corporation
or a subsidiary of the Corporation to a Related Person other than on a
pro rata basis to all holders of capital stock of the Corporation of
the same class or classes held by the Related person, pursuant to a
stock split, stock dividend or distribution or warrants or rights, and
other than in connection with the exercise or conversion of securities
exercisable for or convertible into securities of the Corporation or
any of its subsidiaries which securities have been distributed pro rata
to all holders of capital stock of the Corporation; (f) the acquisition
by the Corporation or a subsidiary of the Corporation of any securities
of a Related Person; (g) any reclassification of the common stock of
the Corporation, or any recapitalization involving the common stock of
the Corporation or any similar transaction (whether or not with or into
or otherwise involving a Related Person) that has the effect directly
or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity or convertible securities
of the Corporation or any subsidiary that are directly or indirectly
owned by any Related Person; and (h) any agreement, contract or other
arrangement providing for any of the transactions described in this
Article XIII.
(2) Such affirmative vote shall be required notwithstanding
any other provision of these Articles, any provision of law, or any
agreement with any regulatory agency or national securities exchange
which might otherwise permit a lesser vote or no vote; provided,
however, that in no instance shall the provisions of this Article XIII
require the vote of greater than 85% of the voting power of the
outstanding shares entitled to vote thereon for the approval of a
Business Combination.
(3) The term "Business Combination" as used in this Article
XIII shall mean any transaction which is referred to in any one or more
of subparagraphs A(1)(a) through (h) above.
B. The provisions of paragraph A shall not be applicable to
any particular Business Combination, and such Business Combination
shall require only such affirmative vote as is required by any other
provision of these Articles, any provision of law, or any agreement
with any regulatory agency or national securities exchange, if the
Business Combination shall have been approved in advance by a
two-thirds vote of the Continuing Directors (as hereinafter defined;
provided, however, that such approval shall only be effective if
obtained at a meeting at which a continuing Director Quorum (as
hereinafter defined) is present.
C. For the purposes of this Article XIII the following
definitions apply:
(1) The term "Related Person" shall mean and include
(i) any individual, corporation, partnership or other person
or entity which together with its "affiliates" or "associates"
(as those terms are defined in the Act) "beneficially owns"
(as that there is defined in the Act) in the aggregate 10% or
more of the outstanding shares of the common stock of the
Corporation; and (ii) any "affiliate" or "associate" (as those
terms are defined in the Act) of any such individual,
Corporation, partnership or other person or entity; provided,
however, that the term "Related Person" shall not include the
Corporation, any subsidiary of the Corporation, any employee
benefit plan, employee stock plan of the Corporation or of any
subsidiary of the Corporation, or any trust established by the
Corporation in connection with the foregoing, or any person or
entity organized, appointed, established or holding shares of
capital stock of the Corporation for or pursuant to the terms
of any such plan, nor shall such term encompass shares of
capital stock of the Corporation held by any of the foregoing
(whether or not held in a fiduciary capacity or otherwise).
Without limitation, any shares of the common stock of the
Corporation which any Related Person has the right to acquire
pursuant to any agreement, or upon exercise or conversion
rights, warrants or options, or otherwise, shall be deemed
"beneficially owned" by such Related Person.
(2) The term "Substantial Part" shall mean more than
25% of the total assets of the entity at issue, as of the end
of its most recent fiscal year ending prior to the time the
determination is made.
(3) The term "Continuing Director" shall mean any
member of the board of directors of the Corporation who is
unaffiliated with and who is not the Related Person and was a
member of the board prior to the time that the Related Person
became a Related Person, and any successor of a Continuing
Director who is unaffiliated with and who is not the Related
Person and is recommended to succeed a Continuing Director by
a majority of Continuing Directors then on the board. (4) The
term "Continuing Director Quorum" shall mean two-thirds of the
Continuing Directors capable of exercising the powers
conferred on them.
ARTICLE XIV
EVALUATION OF BUSINESS COMBINATIONS
In connection with the exercise of its judgment in determining what is
in the best interests of the Corporation and of the stockholders, when
evaluating a Business Combination (as defined in Article XIII) or a tender or
exchange offer, the board of directors of the Corporation shall, in addition to
considering the adequacy of the amount to be paid in connection with any such
transaction, consider all of the following factors and any other factors which
it deems relevant; (A) the social and economic effects of the transaction on the
Corporation and its subsidiaries, employees and customers, creditors and other
elements of the communities in which the Corporation and its subsidiaries
operate or are located; (B) the business and financial condition and earnings
prospects of the acquiring person or entity, including, but not limited to, debt
service and other existing financial obligations, financial obligations to be
incurred in connection with the acquisition and other likely financial
obligations of the acquiring person or entity and the possible effect of such
conditions upon the Corporation and its subsidiaries and the other elements of
the communities in which the Corporation and its subsidiaries operate or are
located; and (C) the competence, experience, and integrity of the acquiring
person or entity and its or their management.
ARTICLE XV
INDEMNIFICATION
Any person who was or is a party or is or is threatened to be made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (whether or not by or
in the right of the Corporation) by reason of the fact that he is or was a
director, officer, incorporator, employee, or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer,
incorporator, employee, partner, trustee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise (including an employee
benefit plan), shall be entitled to be indemnified by the Corporation to the
full extent then permitted by law against expenses (including counsel fees and
disbursements), judgments, fines (including excise taxes assessed on a person
with respect to an employee benefit plan), and amounts paid in settlement
incurred by him in connection with such action, suit, or proceeding. Such right
of indemnification shall inure whether or not the claim asserted is based on
matters which antedate the adoption of this Article XV. Such right of
indemnification shall continue as to a person who has ceased to be a director,
officer, incorporator, employee, partner, trustee, or agent and shall inure to
the benefit of the heirs and personal representatives of such a person. The
indemnification provided by this Article XV shall not be deemed exclusive of any
other rights which may be provided now or in the future under any provision
currently in effect or hereafter adopted of the bylaws, by any agreement, by
vote of stockholders, by resolution of disinterested directors, by provisions of
law, or otherwise.
ARTICLE XVI
LIMITATIONS ON DIRECTORS' LIABILITY
No director or officer of the Corporation shall be personally liable to
the Corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer, except: (A) for acts or omissions that involve
intentional misconduct, fraud or a knowing violation of law; or (B) the payment
of distributions in violation of Nevada Revised Statutes Sec.78.300. If the
General Corporation law of the State of Nevada is amended after the date of
filing of these Articles to further eliminate or limit the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the General Corporation
Law of the State of Nevada, as so amended. Any repeal or modification of the
foregoing paragraph by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
ARTICLE XVII
AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the Corporation is expressly authorized to
adopt, repeal, alter, amend and rescind the bylaws of the Corporation by a vote
of two-thirds of the board of directors. Notwithstanding any other provision of
these Articles or the bylaws of the Corporation, and in addition to any
affirmative vote required by law (and notwithstanding the fact that some lesser
percentage may be specified by law), the bylaws shall be adopted, repealed,
altered, amended or rescinded by the stockholders of the Corporation only by the
vote of the holders of not less than 75% of the voting power of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose (provided that notice of
such proposed adoption, repeal, alteration, amendment or rescission is included
in the notice of such meeting), or, as set forth above, by the board of
directors.
ARTICLE XVIII
AMENDMENT OF ARTICLES OF INCORPORATION
Subject to the provisions hereof, the Corporation reserves the right to
repeal, alter, amend or rescind any provision contained in these Articles in the
manner now or hereafter prescribed by law, and all rights conferred on
stockholders herein are granted subject to this reservation. Notwithstanding the
foregoing at any time and from time to time, the provisions set forth in
Articles VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII and this Article XVIII
may be repealed, altered, amended or rescinded in any respect only if the same
is approved by the affirmative vote of the holders of not less than 75% of the
voting power of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for this
purpose as a single class) cast at a meeting of the stockholders called for that
purpose (provided that notice of such proposed adoption, repeal, alteration,
amendment or rescission is included in the notice of such meeting).
ARTICLE XIX
INCORPORATOR
The name and address of the incorporator is:
Robert L. Sonfield, Jr.
770 South Post Oak Lane
Houston, Texas 77056-1913
I, the Undersigned, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Nevada, do make and file these articles of in corporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 18th day of November, 2003.
- -------------------------------------
Robert L. Sonfield, Jr.
STATE OF TEXAS
COUNTY OF HARRIS
On this 18th day of November, 2003, before me, a Notary Public
personally appeared Robert L. Sonfield, Jr., who acknowledged
that he executed the above instrument.
-----------------------------
Notary Public
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT BY RESIDENT AGENT
The Corporation Trust Company of Nevada hereby accepts the appointment
as Resident Agent of Aztec Communications, Inc.
The Corporation Trust Company of Nevada
Resident Agent
By: ______________________________________ Date: November 20, 2003
E. A Wallace, Assistant Secretary
PROXY
AZTEC COMMUNICATIONS GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 10, 2004
The undersigned hereby appoints L. Mychal Jefferson, II, Terry Roberts,
Monica W. Jefferson, and each of them as the true and lawful attorneys, agents
and proxies of the undersigned, with full power of substitution, to represent
and to vote all shares of Common Stock of Aztec Communications Group, Inc. held
of record by the undersigned on October 25, 2003 at the Annual Meeting of
Stockholders to be held on January 10, 2004 at the offices of Sonfield &
Sonfield, 770 South Post Oak Lane, Suite 435, Houston, Texas 77056 at 10:00 AM
(CST), and at any adjournments thereof. Any and all proxies heretofore given are
hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR THE
PROPOSALS LISTED IN NUMBERS 1, 2 AND 3.
1. Reincorporate the Company from Utah to Nevada.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Ratification of Gwendolyn J. Giles CFE, CPA as Aztec's
independent public accountants for the fiscal year ending
August 31, 2004
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE SPECIAL
MEETING.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
NUMBER OF SHARES OWNED __________________________
SIGNATURE
-------------------------------------------
(TYPED OR PRINTED NAME)
-------------------------------------------
SIGNATURE IF HELD JOINTLY
-------------------------------------------
(TYPED OR PRINTED NAME)
DATED: ______________________
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.